A place for a tired old woman to try to figure things out so that the world makes a bit of sense.

Wednesday, June 01, 2011

Back At It

Thank heavens for Michael Hiltzik and the Los Angeles Times. California's health insurers are back to fighting any proposal which might interfere with what they consider their untouchable right to raise premiums at any moment for any reason. After all, they've bought that right via campaign contributions to state legislators. Their latest tactics, blatant untruths, however, have raised Hiltzig's eyebrows:

Here's how badly the state's health insurance companies want to kill a bill in the Legislature giving state officials the power to put the kibosh on excessive premium increases.

Not content to fight the measure on the merits, they've mustered bogus facts and figures against it and tried to convince the public that a measure allowing regulators to limit premium increases will actually cost people money. ...

The bill in question is AB 52, introduced by Assemblyman Mike Feuer (D-Los Angeles). It would prevent health insurance premium increases from going into effect without the prior approval of the commissioner of insurance or the director of the Department of Managed Health Care, who share jurisdiction over health insurers.

The bill would give insurance regulators the same prior-approval authority they were given over auto and homeowner policies by Proposition 103 in 1988. Under current law, California health insurance regulators can't reject a rate increase even if they think it's unreasonable — they can only try to jawbone the insurance company or shame it with a public objection. ...

The California Assn. of Health Plans maintains that the bill won't do anything to address the underlying drivers of healthcare costs, which it says are charges by drug companies, device manufacturers, and doctors and hospitals. The response by the other side is that even if that were so, prior approval will help ensure that insurance companies calculate and project those costs accurately and reasonably. That's something that insurers haven't been doing too well lately. Last year both Aetna and Anthem backed away from huge rate hikes after independent actuaries found glaring mathematical errors in their rate filings.

But even beyond the mathematical "lapses" which killed one round of premium hikes, there is evidence that the increases we keep getting from the health insurers are bogus and unnecessary, chief of which is the continuing profitability of the insurance companies themselves even before the proposed increases.

And the new bill has some good history behind it. The California electorate gave similar authority to the insurance regulators of auto and home insurers in 1988. Those insurers haven't exactly gone broke and pulled out of the state. In fact, those insurers are still making healthy profits and the market is still working competitively.

Now it's up to the state legislature to finally pass a bill that does the same thing for health insurance. The question, as always, is whether state legislators are more interested in serving their constituents than their campaign donors.